Cognizant Technology Solutions reported a 26.3% rise in net profit to $557 million in the first quarter ended March.
Its revenues for the quarter rose 10.7% from a year earlier to $3.55 billion.
Raj Mehta, president, Cognizant, said that the company will significantly ramp up its U.S.-based workforce by hiring experienced professionals in the open market and by making more use of university, veteran, and related programs.
“We are shifting our workforce largely in response to clients’ increasing need for co-innovation and co-location.
“While we will still seek visas for highly specialised and skilled talent, we’re reducing our dependence on these visas,” Mr. Mehta said during a conference call.
“ In fact, during the most recent filing period, on April 1, we applied for less than half the number of visas we sought last year. And we expect to further reduce our need for these visas going forward.”
Sequentially, profits grew 2.4%. The NASDAQ-listed company has indicated that for the next quarter its revenue is expected to be in the range of $3.63 billion to $3.68 billion. Full year 2017 revenue is expected to be in the range of $14.56 billion to $14.84 billion, growing 8-10%.
Cognizant’s CEO Francisco D’Souza, said ,“We ...delivered solid results in the first quarter and continued to build our digital solutions portfolio, expand our skills, and enhance our engagement with clients.” In an earnings call, Mr. D’Souza said that training for the digital era would be the focus going forward. “This year, our goal is to develop more than 10,000 engineers and architects, plus another ten thousand across niche areas of artificial intelligence, the internet of things, and cognitive computing,” he said.
During the three months ended March 31, 2017, the company incurred severance costs related to the realignment and advisory fees related to non-routine shareholder matters and to the development of our realignment and return of capital programmes. These costs are excluded from non-GAAP operating margin and non-GAAP diluted earnings per share. The company expects to incur the majority of the total costs related to the realignment programme in 2017.
The Teaneck New Jersey headquartered firm is realigning the business to accelerate the shift to high-value digital transformation work while continuing to reassess less profitable opportunities. As part of this realignment the firm plan’s to improve utilisation, optimise its pyramid structure and talent supply chain management to better align resourcing with client demand., simplify our business unit overhead structure, and leverage corporate function spend more effectively. “This realignment is part of our plan to improve our non-GAAP operating margin to 22% in calendar year 2019 while continuing to drive revenue growth,” the company said in a statement.
Cognizant added 7 strategic customers in the quarter, defined as clients that have the potential to generate at least $5 million to $50 million or more in annual revenue, bringing the total number of strategic clients to 336. The company ended the quarter with approximately 261,200 employees globally.
